The Gap Is Filled, but the Frustration Remains

 

Well, we finally got it over with, TLRY filled its gap at 8.43. Being long this stock, that’s obviously not something I was hoping to see, but at the same time I’m glad the market dealt with it now instead of dragging it out. Open gaps have a way of acting like magnets, and once they’re filled, at least that question mark is removed.

On the left above is a 5-minute chart of TLRY. The stock opened flat and then quickly sold off, tagging the gap fill around 8.40. After that initial move lower, TLRY pretty much went nowhere for the rest of the session. We saw a lot of sideways action, very little momentum, and the stock ultimately closed right near its low. That kind of price action tells me there’s still no real urgency on the buy side, at least in the short term.

If you shift over to the daily chart on the right, you can clearly see the gap that was filled today. From a pure technical standpoint, this is actually an area where you could see a bounce or even the start of a rally. Gap fills often mark logical inflection points. The problem, as usual with this sector, is the lack of a catalyst. Right now, no news is bearish news, and that’s exactly why we continue to see the entire cannabis sector drifting lower in what feels like a slow, painful bleed.

We’re down to just three more trading days left in the month of January, and it would be great to finally hear something concrete regarding the finalization of rescheduling. That’s the overhang everyone is waiting on, and until we get clarity, it’s hard to see aggressive buying step in.

That said, I want to be clear about my mindset. I’m in this trade for a longer-term move. I still believe the fundamentals favor a bull market in the cannabis sector, and I’m willing to sit through short-term noise to be positioned for that. In the near term, though, I’ll be the first to admit this has been extremely frustrating.

For now, all we can do is stay patient, manage risk, and see what tomorrow brings.

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